Board OKs ‘balanced’ $75.5 million Synod budget

ST. LOUIS — The Synod Board of Directors took care of business in rapid fashion at its May 16-17 meeting here.

In fact, on the first day of that meeting, the Board handled all its open-session decisions, which included adopting a balanced national-Synod operating budget (or “spending plan”) of $75,485,597 for the fiscal year that starts July 1, setting the location for the 2016 LCMS convention — Milwaukee, acting on a number of other resolutions and approving appointments to Synod boards and LCMS-related entities in eight separate actions.

Synod First Vice-President Rev. Dr. Herbert C. Mueller Jr. (left) thanks the LCMS Board of Directors and staff gathered during the Board’s May 16-17 meeting to wish him “happy birthday” on the first day of the meeting. Mueller also spoke of his upcoming open-heart surgery the following week that was considered to be successful. Pictured, from left, are Board member James Carter, LCMS Chief Financial Officer Jerald C. Wulf, Board members Kathy Schulz, Kurt Senske and Ed Everts, and the Rev. Dr. Jon Vieker, senior assistant to the Synod president. (LCMS Communications/Joe Isenhower Jr.)

Board members also heard reports from top Synod officers and from LCMS Mission Advancement Executive Director Mark Hofman and discussed plans for a retreat during their next meeting, Aug. 22-23 here.

The following day, the Board met in closed session to discuss a number of matters before ending its meeting that morning.

“I am pleased to report to you that we have a balanced budget to present and that balanced budget includes a half-million-dollar contingency,” LCMS Chief Financial Officer Jerald C. Wulf told the Board, adding that “no position cuts” were being proposed to the Board.

He pointed to several “significant challenges” for the fiscal-year 2015 budget, including the discontinuation of Thrivent Churchwide Grant dollars that typically exceeded $1 million in recent years, a 9 percent increase in the budget for health-insurance coverage that the Synod provides for its employees and a more than “$500,000 net reduction in unrestricted support from congregations through districts.”

On the positive side, Wulf noted that the 2014-15 budget reflects a $380,000 reduction in general and administrative costs for Synod offices at the LCMS International Center.

The 2014-15 operating budget of $75,485,597 compares with the 2013-14 operating budget of $81,762,189. Much of the difference between those two operating budgets is due to funding for the LCMS convention and National Youth Gathering that were included in the 2013-14 budget. Those events occur every three years.

Wulf told Reporter that the budgeting process for the coming year started last November, when that process was reviewed with regional directors for the Office of International Mission. He said that meeting included “a projection of flat to declining unrestricted revenues,” as well as the “the need to have long-term strategies for mission, [to] guide annual budget strategies.”

Wulf added that unit executives for the Synod staff “were then instructed to prepare proposed budgets with scenarios for no change, a decrease of 5 percent and a decrease of 10 percent in unrestricted revenue.” He said that by the time of the February Board of Directors meeting, “projections of unrestricted revenue were completed, showing a decrease of $1 million was likely.”

For the May Board meeting, it was projected that 2014-15 undesignated (or unrestricted) revenues would be down by $784,000 from 2013-14, including decreases of $429,000 from the districts.

Wulf, LCMS Executive Director of Accounting Ross Stroh and Synod President Rev. Dr. Matthew C. Harrison complimented the efforts of all who were involved in “this very collegial process,” as Stroh termed it.

The Board also approved a fiscal year 2014-15 capital budget of $950,839 for the national Synod.

The dates of the 2016 Synod convention in Milwaukee will be announced later. The Board of Directors is only responsible for determining the location, in consultation with the Synod’s convention manager, and the Synod president is responsible for determining the dates.

Other actions

In other actions at its May meeting, the LCMS Board of Directors approved:

revising its policy concerning appointments and filling vacancies, based on changes made by the 2010 Synod convention to the makeup of several LCMS boards and commissions.

referring to the Synod’s Commission on Handbook the matter of whether to accept additional nominations from the “floor” when filling mid-term vacancies.

a policy requiring that LCMS Mission Advancement “has a current and periodically reviewed fundraising policy manual that guides the fundraising activities of Corporate Synod, its employees, contractors and volunteers.”

a name change and revision of governing documents for the Concordia Asia Educational Foundation. The new name is “Concordia International Foundation.”

changes in the Board policy concerning “special emphasis observances” in the Synod. As noted in a “Whereas” paragraph, the action seeks “to implement a process that better coordinates and facilitates the coordination and approval of requests for special observances.”

The appointments to the International and National Mission Boards are to fill vacancies.

Reports

“The Synod remains pretty calm as it goes about its work,” Harrison told the Board in his president’s report.

He said the visitations that he and First Vice-President Rev. Dr. Herbert C. Mueller Jr. are making to LCMS districts “have been extremely positive.” He explained that each visitation typically begins with visiting the district president, may involve having a meal with him and his wife “just to see how they’re doing,” then conversations with the district president and vice-presidents and “several hours with the district board of directors.” He said the following day may include a gathering of circuit visitors or others, with a question-and-answer period.

Harrison said that for his presentation, he discusses matters such as finances and research on LCMS membership statistics over the last 40 years.

“We confront the brutal facts,” he said of discussion with district leaders around those issues. “The good news is that we are all in this together, and knowing that the Lord will bless.”

Harrison added that declining Synod finances and membership statistics would be on the agenda of the Board’s August retreat.

He also said that his office is working to carry out resolutions of the 2013 Synod convention that call for task forces on various topics and issues, and that an “internal” task force has been formed of stakeholders to plan ways for the LCMS to celebrate the 500th anniversary of the Reformation in 2017.

Wulf said during his report that as of the end of April, Synod expenditures came to roughly $59 million, with net assets of $61 million released against expenses, for “a very favorable variance of $2,680,000.

So I’m confident we’re going to end the year not exceeding our budget and we have not had to use any of the contingency at this point,” he said. The contingency amount included in the Synod’s 2013-14 budget is $51,612.

Wulf said that the “historic Concordia University System debt” stands at about $16 million, and that it is being paid down by about $150,000 each month.

Synod Secretary Rev. Dr. Raymond L. Hartwig noted that the first of 14 planned postcards to congregations, reminding them of their responsibilities in regard to the 2016 Synod convention, was due to be mailed June 1. It concerns preparations for circuit forums.

That postcard lists “four items [that] that should appear on the agenda” of each congregation’s required voters meeting before its circuit forum.

Hartwig’s office facilitated similar postcard mailings to congregations before the 2013 Synod convention. Most of those postcards addressed changes in procedures that resulted from structure and governance decisions of the 2010 convention.

“We are working to make certain that preparations for the 2016 convention are even better organized than last time around,” Hartwig told the Board.

Hofman briefed the Board on Mission Advancement’s direct-gift fundraising efforts and the plan to support the upcoming budget cycle.

Starting with a review of the management goals for Mission Advancement that were set a year ago, he provided a progress report and spoke to ongoing issues that require attention in the upcoming fiscal year.

For the coming fiscal year, Hofman stated that direct-gift goals will cumulatively increase by $1.71 million, to $36.4 million. He added that several goal increases are possible because of “favorable trends in actual donor interest and support.”

Hofman also said that Mission Advancement’s 2014 goal for cutting direct-gift fundraising costs was “too aggressive, and negatively impacted the ability to equitably satisfy every net revenue expectation.”

He explained that the cost ceiling set for 2015 “is more realistic, given the fundraising environment the Synod will face, [that it] incorporates targeted investments in capacity-building and should increase prospects of fully meeting net revenue and donors’ expectations in the future.”